VZCZCXRO8491
RR RUEHCHI RUEHDT RUEHHM RUEHNH
DE RUEHBK #1833/01 1650904
ZNR UUUUU ZZH
R 130904Z JUN 08
FM AMEMBASSY BANGKOK
TO RUEHC/SECSTATE WASHDC 3380
INFO RUCNASE/ASEAN MEMBER COLLECTIVE
RUEHCHI/AMCONSUL CHIANG MAI 5359
RUEHRC/DEPT OF AGRICULTURE WASHINGTON DC
RUEATRS/DEPT OF TREASURY WASHINGTON DC

UNCLAS SECTION 01 OF 02 BANGKOK 001833 
 
 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: EAGR ECON ELAB ENRG EPET PGOV SOCI TH
SUBJECT: DIESEL UP, CABBAGE DOWN, THAI PROTESTS ALL AROUND 
 
BANGKOK 00001833  001.2 OF 002 
 
 
¶1. (U) Summary.  This week in Thailand, farmers, fishermen, laborers 
and truckers staged demonstrations around the country to protest 
high fuel prices and low crop prices.  The protests appear neither 
coordinated nor partisan but rather are a reaction to record high 
diesel prices and downward price pressures from Chinese and Lao 
vegetable imports.  It is unclear whether these expressions of 
dissatisfaction on the part of a core People's Power Party (PPP) 
constituency reflect a decline in support for PPP that would affect 
the party's standing in the event of new elections.  Having 
acquiesced to the rice and garlic farmers, the government is under 
pressure to widen subsidies or risk undermining its rural, agrarian 
base. If the government does not give in to the protesters' demands, 
the farmers have threatened to converge on Government House in 
Bangkok and the truckers have threatened to block highways.  End 
summary. 
 
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Cabbage and garlic prices are down 
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¶2. (U) Garlic farmers in Mae Hong Son province in northern Thailand 
blocked the Mae Sariang-Chiang Mai highway and demanded that the 
government guarantee a higher price of THB 25 per kilogram.  Thai 
garlic producers in northern Thailand often complain about how they 
cannot compete against a flood of cheap Chinese garlic imports.  The 
farmers agreed to unblock the road after the government decided to 
set aside THB 300 million to buy garlic at THB 22 per kilogram from 
farmers in five Northern provinces.  This follows the June 4 
decision to set an intervention price on white rice paddy of THB 
14,000 per ton, which is 20 percent higher than world market 
prices. 
 
¶3.  (U) Cabbage farmers in Petchabun province, also in Northern 
Thailand, blocked traffic to protest cabbage prices that have 
plummeted to 50 satang per kilogram (100 satang=1 baht), down from 
THB 7 per kilogram.  Thai press reports that farmers blame the drop 
on a flood of cheap imports from Laos.  If the government does not 
give in to the cabbage farmers within seven days, they plan to stage 
a protest at Government House in Bangkok. 
 
¶4.  (U) In April, the Cabinet approved a two-year farmers' debt 
moratorium, to run until March 2010.  The president of the Bank for 
Agriculture and Agriculture Cooperatives Thirapong Thangthirasunan 
said the plan would cover 334,535 farmers with debts of THB 17.8 
billion.  Farmers are complaining that they have yet to receive debt 
moratorium payments.  This combined with drastically rising fuel 
prices (and falling prices in the case of a few crops) has created a 
tense political situation.  Because the government acquiesced to the 
demands of the rice farmers (and now this week the garlic farmers), 
the sense in the agricultural sector is that other farmers are 
following the lead of the rice farmers, hoping to get their share of 
the government pie. 
 
¶5.  (U) Although Thailand is the world's largest rice exporter, 
agriculture in Thailand is more about people than money and hence 
very political.  Agriculture in the first quarter of 2008 accounted 
for only 8.7 percent of Thai GDP, but nearly half of overall 
employment. 
 
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The price of diesel hits a record high 
-------------------------------------- 
¶6.  (U) Several hundred ten-wheel truck drivers protested in Khon 
Kaen, Nakhon Ratchasima, and Nakhon Sawan provinces in Northeastern 
and north-central Thailand to protest the high price of diesel.  The 
truckers' demands include a government subsidy to cut the price of 
diesel by THB 5 per liter.  Around 100 18-wheel truck drivers 
gathered on a highway in Bangkok, and up to 1000 container trucks 
blocked a road near the port of Laem Chabang to protest the high 
price of diesel.  Truckers have threatened to strike and block 
Thailand's highways next week. 
 
¶7.  (U) The high price of fuel is hitting farmers, fishermen, 
truckers, and taxi drivers hard.  In Thailand, as of June 13, the 
average price of diesel (which accounts for the majority of fuel 
consumption in Thailand and the overwhelming majority in the sectors 
that are protesting) was THB 41.74 per liter, a record high. 
Translated into dollars (at the June 13 rate of THB 33.14 per USD) 
and gallons, this works out to USD 4.768 per gallon, compared to an 
average price in the U.S. of USD 4.692.  Thai per capita GDP in 2007 
was USD 3,727, compared to U.S. per capita GDP of USD 45,845.  Thus, 
filling a truck or tractor with 100 gallons of diesel costs 13 
percent of per capita GDP in Thailand, compared to 1 percent in the 
U.S.   Regular unleaded in Thailand works out to USD 4.654 per 
gallon, compared to an average of USD 4.039 in the U.S.  The Thai 
government has many plans for alternative energy, including 
biodiesel made from palm and used cooking oil, but such plans are 
over the longer term and by most estimates will account for only a 
minuscule share of the fuel supply.  In the case of palm oil, the 
price of crude palm oil is presently higher than the price of 
 
BANGKOK 00001833  002.2 OF 002 
 
 
refined diesel at the pump. 
 
---------------------------- 
And labor unions are uneasy 
---------------------------- 
¶8.  (U) Meanwhile, there have been rumors of a strike targeted 
against state-owned enterprises (SOEs).  Savit Kaewwan, 
Secretary-General of the State Enterprise Workers' Relation 
Confederation (SEWRC) told us that there will only be a strike if 
the government uses force to shut down the ongoing People's Alliance 
for Democracy (PAD) protests in Bangkok.  Savit also cited concerns 
about corruption in SOE projects.  The SEWRC will convene a meeting 
of 43 SOE unions on June 17 to discuss the political, economic, and 
social situation in Thailand and will decide whether or not to join 
the PAD protest. 
 
¶9.  (SBU) Comment: Every indication is that the protests have 
erupted spontaneously and are neither well-coordinated nor 
politically partisan.  However, it should concern Prime Minister 
Samak's government that rural farmers, normally a strong base of 
support for the ruling People's Power Party (PPP), are voicing 
displeasure with economic conditions at a time when protests 
continue from other government opponents such as the PAD, whose 
grievances are decidedly separate from the farmers'.  The government 
acquiescence on rice and garlic subsidies, and the continued 
tolerance of the PAD demonstrators, may be emboldening Thais to 
express their dissatisfaction in a more public manner.  It is 
currently unclear how these farmers' protests will affect the 
political climate in Bangkok, where the PAD has organized 
demonstrations against constitutional amendment.  Under current 
circumstances, the farmers' protests do not appear to increase the 
likelihood of early elections, but they increase pressure on the 
Thai government to subsidize other crops and fuel.  While the RTG 
currently has the budgetary capacity to increase subsidies, the 
underlying economic wisdom is another matter. 
 
 
John